China's travel club Yuelvhui completes an angel round
The business mode of Yuelvhui is to “expand lifestyle and travel IP on top of meeting basic travel demands”.
Yuelvhui, a travel club that offers customized theme tours for its members in China, has completed an angel round financing of tens of millions of yuan backed by Alphax Partners and Guyin Fund, reported 36Kr. A Yuelvhui executive Zheng Dai revealed that the fund would be used for recruitment and product development.
Mr. Dai was previously vice president and a founding member of China’s online travel information provider Qunar.
Launched in June this year, Yuelvhui is positioned as a members-only club, offering access to upmarket hotels at preferential rates. It even lets members bid to stay at four-or five-star hotels for free, making use of hotels’ idling rooms.
While using budget stay in upmarket hotels as a drawcard, Yuelvhui’s key focus is on the concept of travel IP, offering unique experiences and itineraries presented with IP (celebrity, iconic ways of travel) elements in collaboration with celebrities, internet celebrities and local people, who will lead club members on interesting tours completed with cozy hotel stays and authentic dining experiences.
In short, the business mode of Yuelvhui is to “expand lifestyle and travel IP on top of meeting the most fundamental travel demands”.
Yuelvhui targets the urban middle class who have guaranteed purchasing power and lifestyle pursuits. Mr. Dai believes that hotels and related services are the most often-used basic travel needs. "The middle class actually cares more about cost than they would admit," he said, using his experience in Qunar as an example, that customer loyalty can’t rival 200 yuan price difference. He said that the middle class is drawn by the significant rate differences of upmarket hotels, and revealed that hotels provided on Yuelvhui are all four-star or above, at rates lower than those of Ctrip.
The platform is also drawing customers with standard products as users are quick to make decisions on such products. The formula of leveraging the basic needs of upmarket hotels and standard products to attract customers that have guaranteed purchasing power is effective for expanding its customer base. In a bid to encourage customers’ word of mouth and active level, Yuelvhui offers bonus points that members can use to access exclusive products. Since going live three months ago, Yuelvhui has registered more than 3 million users and claims it is already breaking even.
Like most companies offering customized tours, Yuelvhui is also facing the problems of how to sell products on a larger scale and how to ensure distinctive IP and experience?
"Standardization is never an option for non-standard resources." Mr. Dai thinks that cost-effective products such as hotels and regular tours are the basic needs for members while distinctive experiences are more like "occasional surprises". All distinctive products will eventually become conventional when they are available on a regular basis. How the platform can keep offering special experiences depends on ongoing community management, communication with users to encourage them to contribute IP and provide resources, Mr. Dai said.